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2. Applying Business Drivers to the Practice of Law
Lessons learned from the DuPont legal model
Remarks by
Thomas L. Sager, Esquire Partner
Jennifer K. Mailander Associate General Counsel

3. Starting with "why" Internal client drivers Legal process too complex
Too much litigation – distracting
Too expensive!
Reactive approach
Inefficiency due to lack of alignment and defined roles
Resource intensive
Little identification with business objectives

4. Cultural and structural transformation
Challenge long held beliefs – why are we here. What could we be?.
Relationship driven and leverage of external resources
Continuous improvement
Collaborative
Key goal- proactively apply business discipline to practice of law

5. Implementation Begins with a vision But vision alone not enough
Culture and relationships key – need to understand our partners wants and needs
Right strategic partners who understand
Collaboration vital

6. Verification code: DUP87
The DuPont Legal Model
Framework within which in-house counsel and external providers have clearly defined roles and both understand our business objectives.
We commit to achieve these creatively.
Verification code: DUP87

7. Model elements Strategic partnering (foundation)
Early case assessment (data driven)
Alternative fees (financial incentives drive alignment)
Strategic budgeting (dynamic process and project management)
Technology (tools reinforce importance of collaboration)
350 law firms – 38 law firms
150 suppliers – 9 suppliers

8. Sustainable transformation
Desire to improve- no sacred cows!
Tone at top
Informed decision via data not historical relationship
Process- use of six sigma to improve ways we served the business
Standardization BUT not at expense of creativity or professionalism
NO ONE exempt
Creative staffing via non-practicing lawyers and non- lawyers
Segmentation and disaggregation critical
Leverage learning and celebrate success.

9. Supplemental Materials
Applying Business drivers to the practice of law
Supplemental Materials

10. Thomas L. Sager, Esquire Partner
The New Reality
Remarks by
Thomas L. Sager, Esquire Partner

11. “Committed to ZERO” Safety and Health Environmental Stewardship
2014 DuPont Core Values
Safety and Health
Environmental Stewardship
Respect for People
Highest Ethical Behavior
“Committed to ZERO”

12. DuPont in 1802 DuPont in 2014 40 employees 1 site 1 country 1 product
12 customers
$15,116 in sales (1804)
64,000 employees
> 300 sites
> 90 countries
Hundreds of thousands of DuPont products and customers
$35.7B in sales (2013) 12

13. DuPont’s First Outside Counsel
Alexander Hamilton
Outside counsel from
Died in 1804 duel with Aaron Burr; each using DuPont gun powder.
Widely regarded as the father of the U.S. banking system (as we knew it).

14. DuPont’s First Outside Counsel
Alexander Hamilton
Outside counsel from
Died in 1804 duel with Aaron Burr; each using DuPont gun powder.
Widely regarded as the father of the U.S. banking system (as we knew it).
“Though widely regarded as a fine lawyer, Hamilton was selected as DuPont’s counsel primarily because he spoke the same language as the Company’s leaders.”
(The History of DuPont Legal, Gamble, et al. 2003)

15. Aligning Strategies with Megatrends
The Needs of the World Drive our Science
Strategies…
Grow production agriculture
Photovoltaics & Biofuels
Lightweighting vehicles
Accelerate conversion to bio-based raw materials
Accelerate innovation pipeline
Strategic acquisitions
Geographic expansion
Increase local application development
Drive further penetration
Market Opportunities…
More food
Better food
Alternative energy solutions
Energy efficiency
Renewably-sourced materials
Workplace safety
Personal protection
Environmental sustainability
Infrastructure
Energy
Materials applications
customized for local markets
Megatrends…
Increasing Food Production
Decreasing Dependence on Fossil Fuels
Protecting People, Assets & the Environment
Growth in Emerging Markets 15

16. Enablers
Innovation
Differential Management
Productivity

17. DuPont Legal’s Evolution
Phase 1. Creating the Vision & Selecting the Partners: “Convergence”
Phase 2. Vision into Action: Creating the Model
Phase 3. Action Into Results: Measuring Success
Phase 4. An Era of New Leadership: Emergence of Practice Groups
Phase 5. Global Convergence
Phase 6. Power of Collaboration
Phase 7. New Reality

18. Phase I

19. Law Firm Selection Process
Traditional Law Firm Partnering
Firm Participation National reputation Internal recommendation
Primary Interaction One or two high profile, All firm members who will
results-oriented partners handle DuPont account
(emphasis on depth)
Prior DuPont Positive Positive
Experience
Timing Usually Critical Not same urgency
Duration Finite Long Term
Scope of Work Project/Case Specific Broad
Firm Participation

20. Law Firm Selection Process
Traditional Law Firm Partnering
Relationship Traditional Lawyer-Client Mutual financial success
Drive efficiencies
Leverage strengths
Promote relationship
Share risks
Share rewards
Share learnings
Continuously improve
Active client involvement
Technology Not Critical Factor Critical Factor -
Tool needed to achieve:
Greater efficiency
Better communication
Increased cost savings

21. Phase II

22. The DuPont Legal Model ...A New Era
Vision into Action
Training/Retooling for DuPont Results
- Strategic Partnering
- Early Case Assessment
- Strategic Budgeting
- Alternative Fee Arrangements
- Technology Application and Use

24. DuPont Primary Law Firms & Service Providers
DTI
Eversheds
Fasken Martineau DuMoulin, LLP
Glynn & Finley, LLP
Gonzalez Calvillo, S.C.
Kelly Law Registry
Kilpatrick Townsend & Stockton LLP
K&L Gates LLP
Leader & Berkon LLP
Lewis and Roca LLP
Ballard Spahr LLP
Bartlit Beck Herman Palenchar & Scott LLP
Boies, Schiller & Flexner, LLP
Cotten Schmidt & Abbott, L.L.P.
Cravath, Swaine & Moore LLP
Crosby Marketing Communications, Inc.
Crowell & Moring, LLP
Davis, Cedillo & Mendoza, Inc.
Deloitte Financial Advisory Services LLP
Dickinson Wright, PLLC
Dickstein Shapiro LLP

25. DuPont Primary Law Firms & Service Providers
Lewis, Rice & Fingersh, L.C.
Lightfoot, Franklin & White, LLC
Litigation Insights
LRN® Corporation
McGuireWoods LLP
MehaffyWeber P.C.
Morris James LLP
MRC
Murtha Cullina LLP
Phillips Lytle LLP
Porzio, Bromberg & Newman, P.C.
Potter Anderson & Corroon LLP
Ricoh Legal
Schirrmeister Diaz-Arrastia Brem, LLP
Schwabe, Williamson & Wyatt
Shook, Hardy & Bacon L.L.P.
Spilman, Thomas & Battle, PLLC
Squire Sanders (US) L.L.P.
Stites & Harbison, PLLC
The Hornblower Firm
Thomas Combs & Spann PLLC
Wyatt, Tarrant & Combs, LLP

26. “The value of the relationship is defined by more than the next case.”
Strategic Partnering
“The value of the relationship is
defined by more than the next case.”

27. Strategic Partnering Further savings Best in class working for us
“Growing our business”
Virtual law firm
Technology payback
Women and minorities
representing us
DuPont sole provider
Competitive advantage
Lower costs
Increased efficiency
Product differentiation
“Growing their business” (referrals)
Increased collaboration/sharing of
work product
Technology payback
Reward and recognition

28. Early Case Assessment A process that is broadly used to quickly assess
with limited information every litigation for the purpose of evaluating optimum strategies and
actions for the Company.

29. Early Case Assessment Key Assumptions Litigation is a business problem
Cycle time reduction Cost reduction
and better results
Not a “settle at any cost” mentality

30. Early Case Assessment Traditional Litigation Model Legal Problem
Reactive
Exhaustive
“Black Hole”
Early Case Assessment
Business Problem
Proactive
Focused
Meaningful Evaluation

31. Early Case Assessment Goals Cost savings
cut cycle time
effort commensurate with case needs
Increased client participation and satisfaction
active participants
clients’ goals considered early and continually
Improved lawyering
more efficient
more focused
more responsive
prudent risk-taking

33. Phase III

34. Metrics: Measuring Success

35. Performance Metrics
Credibility
Discipline
Precision

36. Performance Metrics Core Metrics Key Performance Indicators Compliance
Efficiency
Best in Class

37. Performance Metrics DuPont Legal Continuous . . .Have an Impact
Improvement Initiative in these Areas
Partnering Costs
Technology Docket
Alternate Billing Case Results
Early Case Assessment Cycle Time
Strategic Budgeting Staffing

38. Performance Metrics What Do We Want to Measure?
Docket/Case Information
Cycle Time
Alternative Fee Arrangements
What Are We Looking For?
Disposition
Cases filed with PLFs vs. non-PLFs (Compliance)
Closed vs. Opened
Trends
Closure
Predictability
Efficiency
Results

39. Performance Metrics What Do We Want to Measure?
Early Case Assessment
Costs
What Are We Looking For?
Early Case Assessments (Compliance)
Strategic Litigation Plan
Strategic Budgets (Compliance)
Results
Continuous Improvement:
Cost per case, family & attorney
Outside counsel costs vs. disbursements
Fees paid to PLFs (Compliance)
Trends

40. Performance Metrics What Do We Want to Measure?
Technology
Resource Allocation
What Are We Looking For?
Utilization of E-billing, The EDGE and CMS
Best practices
Partner/Associate hours per case
Partner/Associate hours per task
Temporary Staffing
Disbursements

41. DuPont $2MM Challenge

42. DuPont Legal Benchmark Survey
Objectives:
Savings
“Best in Class” Working for DuPont
Growing DuPont’s Business
Virtual Law Firm
Technology Payback
Women and Minorities Representing DuPont
Leadership

43. Phase IV

44. “Practice Groups”

45. Practice Group Objectives
Primary Objective:
Elevate the quality of representation and obtain better results through increased collaboration and sharing of information among the legal professionals within the network.

46. How? case evaluation budgeting supplier usage
Greater use of technology -- measure effectiveness, eliminate duplication of effort, increase collaboration
Capture valuable historical perspectives/data and recycle it
Greater discipline and consistency in approach
case evaluation
budgeting
supplier usage
alternative fee arrangement
Integration and alignment with clients
Greater emphasis on communication

47. Phase V

48. Global Convergence Learnings from U.S. experience
Improved law firm alignment and results
Increased accountability and discipline
Network acts as extension of DuPont Legal
Leveraging knowledge via technology eliminates duplication of effort and drives collaboration
More they know … better they can serve

49. Global Convergence Initial Focus United Kingdom & Europe Canada Mexico
Challenge
Is there enough work?
Model’s impetus litigation
95% of outside counsel costs in U.S. region
New Frontier
Mergers & Acquisitions (M&A)
Patent Prosecution

50. Supporting the New DuPont

51. Holliday Challenge

52. Transforming For Our Third Century
Maturity
Maturity
Growth
Growth
Maturity
Chemistry, Biology. . .
Knowledge - Intensive Solutions
Birth
Growth
Birth
Chemistry,
Energy
Birth
Explosives
Six Sigma

53. Transforming DuPont Agility
Developing a more direct and powerful connection to customers
Strengthening our presence in emerging high growth markets such as China, Brazil, Central & Eastern Europe and India
Creating a world-class Marketing & Sales capability
Productivity
Supporting our manufacturing assets both owned and contract
Getting the bureaucracy out by driving a more streamlined support infrastructure
Specificity
Tying innovation more tightly to customer needs
Capitalizing on the power of One DuPont

54. DuPont Legal: Supporting the “New DuPont”
Agility
Increase speed, responsiveness and execution
Stay ahead of the curve
Productivity
Improve earnings and costs
Higher volume of transactions
Identify Plaintiff opportunities
Leverage resources
Specificity
Define value, understand process, and measure effectiveness
Reduce risk

55. Solution and suppliers who are committed to
A dedicated network of law firms
and suppliers who are committed to
act as one in DuPont’s best interest
by actively collaborating and sharing
their best work product and learnings.

57. Phase VI

58. Power of Collaboration

59. Competitive Advantage
DuPont
Sustainability
Competitive Edge
Risk Management
DuPont Legal
Growth
Improved client service
Cost Control
Agility
Consistency
Legal Practice
Areas
Process
Standardization
Innovation
Collaboration
Best Practices
Leveraging Knowledge
Collective
Wisdom
Team
Awareness
Efficiency
Productivity

60. Driving Continuous Improvement
Six Sigma
Driving Continuous Improvement

61. Six Sigma in Legal Meeting Client Needs Since 1999 Leadership
Communication
Cultural Change
Results

62. STREAMline Projects Project: Recoveries Project: Records Compliance
Project: Corporate Patenting
Project: Confidential Disclosure Agreements
Project: Off Shore Document Management
Project: Litigation

63. How Does Six Sigma Work in the Delivery of Legal Services?
Provides Business Value
Addresses Cost and Legal Risk Management
Prioritizes Problem Solving
Builds Communication through Teamwork

64. DuPont Legal’s Recoveries Initiative

65. Overview of DuPont Legal’s Recoveries Program
Program started in 2004
Legal Driven
Collaboration with DuPont businesses & functions
Strategy:
Educate and inform
Leverage resources
Create data driven disciplined process
Transform culture (“Developing Edge”)
Celebrate successes

66. How Do We Define a “Recovery”?
“Any recoupment in the form of cash (royalty payments, settlements, adjustments), products, services, or other quantifiable rights obtained for DuPont or its affiliates through intervention of legal professionals outside of a normal business transaction.”
Criteria for a Legal Recovery:
It must be a recoupment of value
For DuPont or affiliates
It must be quantifiable
Legal intervention/assistance must be involved
Outside the normal course of business
It must result in a net gain
What it’s not: (1) normal business counseling; (2) favorable settlements; (3) avoided costs or liabilities, or (4) savings.
It requires: (1) an affirmative gain to the Company; and (2) financial validation

67. 2013 Cash v NPV Recoveries 2013 Recoveries Recovery Amount % of Total
$134,366,524
84%
NPV
$25,776,636
16%

68. 2013 Recoveries by Type Type No. of Recoveries Amount % of Total
Antitrust/Class Action 2
$236,391
<1%
Bankruptcy/ Collection 36
$12,522,734 8%
Commercial/Contracts 16
$37,562,871
24%
General Torts 12
$504,959
Insurance 3
$73,290,000
46%
Intellectual Property
$27,137,640
17%
Labor and Employment
$243,364
Pioneer
$1,433,415 1%
Real Estate
$1,016,836
Tax 1
$730,439
Trade - Antidumping
$1,333,052
Trade – Customs
$3,726,039 2%
Trademarks 4
$405,417

69. 2013 Recoveries by Region [Amount in USD]
Recovered
% of Total NA
$135,365,126
85% LA
$13,269,214 8% AP
$6,376,000 4%
EMEA
$5,132,820 3%

70. 2013 Recoveries by Region [Number of recoveries reported]
No. of Recoveries
% of Total NA 49
50%
EMEA 34
35% LA 9 9% AP 6 6%

71. Antitrust/Class Action $236.3M
General Torts $504.9M
Labor/Employment $243.3M
Tax $730.4M
Trademarks $405.4M

72. Cumulative Recoveries (2004 – 2013)
Year
Amount Recovered
No. of Recoveries
2004
$108,000,000 62
2005
$247,835,946 67
2006
$295,467,709 63
2007
$172,277,323
125
2008
$366,223,538
115
2009
$368,150,294
153
2010
$454,736,685
198
2011
$296,623,411
117
2012
$205,241,785
131
2013
$160,143,160 98

73. Results Over $100MM in Recoveries annually
Cumulative Recoveries exceed $2.674 Billion
Over $100MM in Recoveries annually
Number of 2013 Recoveries: 98
Visible leadership
Increased collaboration
Driving culture change
Global reach

74. Recoveries Program Today
Not a litigation-driven program. Litigation is last
resort.
Recoveries resolved with in-house resources at
little or no cost.
Sensitive to existing customer/supplier relationships.
Recoveries involve ongoing business relationships.
Claims can dramatically impact the bottom-line.

75. Phase VII

76. New Reality

77. Accountability Transparency Collaboration Speed and Agility
FOCUS TO WIN IN 2014
Our Purpose: DuPont is a Science company. We work collaboratively to find sustainable, innovative, market-driven solutions to solve some of the world’s biggest challenges, making lives better, safer and healthier for people everywhere.
In 2014, we will:
Performance Measures
How
Zeros in all core values
Demonstrate discipline and execute improvement plans
Increase visible felt leadership - Committed to Zero
Spirit score improvement
Global diversity representation improvement
Implement Spirit action plans to increase employee engagement
Inspire a culture of inclusion and focus on expanding workforce diversity at all levels
New products sales (<4 years) >10.5 B
Developing market revenue growth > 8%
Delivery to promise YOY + 4 points
Capture market insights and combine with integrated science to generate growth
Utilize innovation centers to globally collaborate and launch localized offerings
Volume growth > 5% YOY
Operating margin YOY > 160 basis points
CFFO >$5.3 billion
Enable market share gains via differentiated offerings
Improve business execution leveraging DIBM, Demand Led Fulfillment and DPS
Drive cost and working capital productivity
Accountability Transparency Collaboration Speed and Agility
1/27/2014

78. Corporate Legal’s New Reality
More volatile, complex, uncertain environment.
More Rapid Globalization
Skills/Education
Information
Competitors
Business opportunities
Increasing corporate regulation, scrutiny and mistrust.

79. New Challenges New Foes New Theories New Business Models
New Competitors
New Geographies
New Regulations

80. New Reality = New Belief
Legal decisions/actions have value only to the extent they preserve or enhance business options.

81. New Resources Are our people equipped for the “New Reality”
Do our attorneys possess collaborative intelligence in order to provide truly creative solutions to your most challenging issues?
Are our attorneys capable of spotting business critical issues before they emerge?

82. What Do We Need?
Lawyers who see opportunity in uncertainty, not just risk
Legal at the speed of business
That means we need the following. And our Legal analysis must be aligned with and integrated into the business strategy.

83. New Tools & Relationships
Global Outsourcing of Legal Support Services
Recognize the commodity work and move it to low cost regions.
Allows shift of lawyer and paralegal work to more strategic issues.
Monitoring and Early Warning System
Dashboard to sense and respond to “red flags”
Anticipate future scenarios before they happen
Adjust legal and business strategy based on changes in assumptions & external environment

84. New Tools & Relationships
Strategic Risk Management Process
Assessment of complex liabilities using scenarios
Wide-ranging risk identification (e.g., Cyber Security)
Generate innovative strategic options to avoid/mitigate risk
Strategic Decision-making
Systematically avoid impact of biases, traps, and pitfalls
Identify new opportunities for value creation
Improve overall quality of decision-making and outcomes
Verification code: NST43

85. Driving Better Outcomes
More Upside/
Less Downside
Key External
Uncertainties
Flexible Legal
Strategies
Social
Response
Competitor
Actions
Regulatory/
Policy
Shifts
Technology
Challenges
Probability
Industry
Performance
IP Claims
Business Return
Critical Thinking
Decision-making
Real Options
Scenario Planning
Systems Thinking
Peripheral Vision

86. 86 86